The Indonesian Constitution Court (Mahkamah Konstitusi-MK) has ruled that steam baths and spas in Indonesia form part of the traditional health service sector and, as such, cannot be punitively taxed by local government authorities as “entertainment venues.”
The Court ruling addressed case number 19/PUU-XXII/2024 concerning Article 55 paragraph 1 letter l of Law (UU) Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (HKPD Law).
The MK decision stated: “The phrase, and steam baths/spas, in the norm of Article 55 paragraph 1 letter l of the HKPD Law are conditionally contrary to the 1945 Constitution, as long as they are not interpreted as part of traditional health services,” explained Constitutional Justice Arief Hidayat when reading the ruling aloud on Friday (3/1) in the Plenary Courtroom of the Constitutional Court, Jakarta.
The Constitutional Court ruled that the HKPD Law incorrectly classified spas under a single category with discotheques, karaoke, nightclubs, and bars. The MK objected that this single-category classification of spas does not provide legal certainty for spa businesses as traditional health services. Moreover, the common classification raised concerns and fears among the public who use traditional health services.
The Court said the government acted unjustly in making spa services a type of entertainment, show, game, or skill contest and, in so doing, stigmatized spa services.
The Court ruled that traditional health services have a clear and consistent legal basis, namely, in Law Number 36 of 2009 concerning Health, amended by Law Number 17 of 2023.
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